The Federal Reserve is widely expected to start cutting interest rates at the Sep. 18 FOMC meeting, but the debate is turning to how far the central bank will trim its policy rate once the easing begins? A key part of the answer will be determined by how much the neutral rate has increased, if at all, in recent years.

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* Mass IT outage has causes chaos for businesses around the world
* Key U.S. mortgage rate drops to lowest since March: Freddie Mac
* US leading economic index fell slightly in June
* Manufacturing activity expands in July for Philadelphia Fed region
* US jobless claims rose last week, matching highest level so far in 2024:

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The Finance AI Challenge: An Evaluation of the Top Six Free Web-based AI Models
David Krause (Marquette University)
June 2024
This article evaluates six free web-based AI models-ChatGPT, Gemini, Copilot, Claude, Perplexity, and Meta AI-in their performance on finance-related tasks. Utilizing a structured approach, we assessed the models’ abilities to handle factual, conceptual, and computational queries, as well as their proficiency in Python coding through a financial case study. Our findings indicate that ChatGPT, Copilot, and Perplexity consistently excelled, particularly in delivering accurate, comprehensive, and well-structured responses. However, challenges such as maintaining context, ensuring factual accuracy, and mitigating biases persist. The study underscores the need for future research to enhance domain adaptation, explainability, and ethical considerations to ensure reliable and responsible use of AI models in finance.

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* Fed Gov. Waller says central bank ‘getting closer’ to an interest rate cut
* US Q2 GDP nowcast revised up to +2.7% vs. 1.4% in Q1 via GDPNow model
* Federal Reserve’s Beige Book suggests economy is slowing
* US industrial production rose more than expected in June
* US housing starts rose in June, but remain near 2-year low:

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US economic activity is on track to remain slow in this month’s second-quarter GDP report. The expansion is expected to continue via the government’s data, but today’s revised nowcast for Q2 suggests that output will remain more or less comparable to Q1’s modest increase, based on the median estimate for a set of projections compiled by CapitalSpectator.com.

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* IMF lowers its 2024 economic growth forecast for US
* A new era for the US dollar may arrive with a Trump-Vance administration
* Trump says, as president, he would let Fed Chair Powell to finish his term
* US homebuilder sentiment falls in July to lowest level since December
* US retail spending was flat in June, but…
* Retail sales ex-autos rise 0.4%, biggest monthly gain since April:

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If the S&P 500 flatlines from current levels through Dec. 31, 2024, the market would still go into the history books as delivering yet another strong year on the basis of an 18.1% year-to-date rise through Monday (July 15). But the best may be yet to come, some Wall Street firms predict.

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* Recent inflation data ‘add somewhat to confidence’ for rate cuts: Powell
* Biden set to call for 5% cap on rent increases
* Wall Street expecting approval of ethereum ETFs
* Demand for safety supports gov’t bonds despite deteriorating gov’t finances
* NY Fed manufacturing activity index continues to decline in July:

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We’ve been here before. Markets price in high odds that the Federal Reserve will soon start cutting interest rates only to learn otherwise. Is this time different? That’s the bet… again.

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* How might Trumponomics influence the US economy?
* China’s economy slows in Q2 to softest annual pace in five quarters
* Higher interest rates take a toll on earnings at big banks
* What’s the source of portfolio alpha? Behavioral risk a key factor
* Kuwait announces discovery of “gigantic oil field”
* US consumer sentiment drops for second month in July to 8-month low:

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